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Levine Lawrence | Ecoideaz.com

SOLAR ENERGY

OPPORTUNITIES

SOLAR ENERGY

OPPORTUNITIES

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INSTALLED POWER CAPACITY IN INDIA

Year-on-year data on the share of various power sources in India clearly indicates

that coal is steadily losing its dominant share, while renewable energy (RE) sources

have gained rapidly.

Coal72%

Hydro15%

Gas10%

Nuclear3%

Others-RE0%

Installed power capacity – FY2007

Coal59%

Hydro16%

Gas9%

Nuclear2%

RE13%

Others-Oil1%

Installed power capacity – FY2014

Source: Central Electricity Authority, 2014 2

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RISING SOLAR POWER CAPACITY IN INDIA

While the installed capacity of solar power has surged, the per unit purchase

price has collapsed to reach closer to the price of thermal power. The current

solar purchase price of Rs.6.5 per unit is marginally above Rs.5.71 per unit

paid by coal power plants in Delhi.

3

0

2

4

6

8

10

12

14

16

18

0

500

1000

1500

2000

2500

2010 2011 2012 2013 2014

Solar capacity (MW) Purchase Tariff (INR)

Source: Economic Times, 2014

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VOLATILITY IN PETROLEUM PRICES

In contrast to solar power, petroleum prices are quite volatile. Particularly, since the

central govt. has dismantled the administered pricing mechanism, prices have gone

up and down drastically. After the massive collapse in 2014, petroleum prices are

rising again. This kind of volatility is not suitable for any power consumer, which

adds value to the steadily falling solar power price.

4 Source: Mypetrolprice.com, Pune city prices

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FALLING PRICES OF SOLAR PV PANELS

Similarly, the cost of equipment is falling steadily in recent years, enabling solar

power companies to expand their capacities. However, there is a threat of anti-

dumping duties being imposed on Chinese solar PV modules, which is the main

supplier for the Indian market. The crystalline PV module prices have fallen from

INR39 per watt in 4Q2013 to INR35 per watt in 4Q2013.

5 Source: India-Solar-Compass, October-2014

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UPDATE ON SOLAR PV PROJECTS – 4Q2014

6 Source: India Solar Compass, October-2014

The National Solar Mission

has been the biggest boost

for solar power market to

develop since 2010. Gujarat

and Rajasthan have

emerged leaders among

Indian states to offer

incentives through state

policies. However,

Maharashtra has been

quite slow in promoting

this market, but the new

BJP-led government is

expected to push forward

with the pending projects.

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STATE-WISE UPDATE ON SOLAR PV PROJECTS

7 Source: India Solar Compass, October-2014

Credit-worthy states

States with solar policy

States with metering policy

Commissioned projects

Upcoming projects

C

U

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OPPORTUNITIES FOR MARKET ENTRY FOR

SMES The techno-economic feasibility of solar PV projects is now well

established. Numerous private and state-owned companies have entered

the market since 2010 and the market is becoming crowded. Yet, three key

opportunities are still available for newcomers. They are:

EPC contractors for large solar companies

Captive power suppliers for industrial parks

Independent power distributors for villages

Grid connected independent solar project

Zero investment rooftop rent

8

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EPC CONTRACTORS FOR LARGE SOLAR FIRMS

These are Engineering, Procurement & Construction contracts for large

solar power plants, where a leading turnkey solution provider will handle

the entire work right from govt. liaisoning to final commissioning. Since

solar plants mainly require metal framework to place the solar panels and

electrical cabling, there is enough opportunities for sub-contractors in

metal fabrication and construction work.

Large EPC contractors

appoint sub-contractors

to handle the construction

work; typically divided into

civil, mechanical and electrical

activities.

9

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CAPTIVE POWER SUPPLY FOR INDUSTRIAL

PARKS

Many manufacturing companies and telecom tower firms are

converting their diesel backup power units to solar power. This is

mainly happening in rural areas where grid power is irregular and

diesel transportation is difficult. These are the options:

Stand-alone Solar PV system

Grid-connected Solar PV system

Grid-connected Solar PV with battery backup

Hybrid Solar PV system with diesel

10 Source: EAI

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INDEPENDENT POWER DISTRIBUTOR FOR

VILLAGES

Solar power can be used by isolated villages that get irregular grid

power supply. The power distributor can tie-up with telecom tower

for main PPA agreement and sell the excess power to residential

consumers in the village.

11 Source: Business Today, Feb 2015

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GRID CONNECTED INDEPENDENT SOLAR

PROJECT

Solar Energy Corporation of India (SECI) is designated as the

nodal agency by MNRE for developing grid-connected solar power

capacity through Viability Gap Funding (VGF).

Project developers have to infuse capital of at least Rs.1.2

crore/MW. The remaining amount can be raised as loan. SECI will

provide a VGF of up to Rs.1.0 Cr/MW for the open category.

The VGF may be used to return part of the loan or the developer’s

contribution. The VGF will be released in six tranches: 50% on

successful commissioning of the project and the balance 50%

progressively over next 5 years subject to the project meeting

generation requirements. 12

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ZERO INVESTMENT ROOFTOP RENTING

There is another opportunity where business and residential

building owners can utilize their rooftops for renting to solar power

companies. Solar power companies will set up the PV panels on the

rooftop and provide power to the house and supply the excess to

the grid.

13 Source: India Solar Compass, October-2014

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CONTACT FOR FURTHER DETAILS –

Ecoideaz acts as a virtual consultant for SMEs to get expert opinion on

various –

http://www.ecoideaz.com/category/expert-corner

Solar Energy Corporation of India (SECI) is designated as the nodal

agency by MNRE for developing grid-connected solar power capacity

through Viability Gap Funding (VGF).

http://www.indiaenvironmentportal.org.in/content/407280/revised-draft-

guidelines-for-implementation-of-scheme-for-setting-up-of-2000-mw-grid-

connected-solar-pv-power-projects-under-jnnsm-batch-iii/

Commissioning status of Grid Connected Solar Power Projects under

JNNSM (As on 10.03.2015)

http://www.mnre.gov.in/solar-mission/jnnsm/introduction-2/

Investor receives funds from bank / financial entity with or without

Rays Power Infra’s assistance.

http://rayspowerinfra.com/invest-proceed.aspx

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